Friday, January 30, 2009

Alternative to Universal Healthcare

Explore the possibility of having “universal healthcare” through universal access to government loans instead of limitless insurance. These loans would cover the cost of medical procedures and thus allowing everyone to get care that they needed. They would function like student loans: the payments would be reasonable for all incomes (payments max out at a certain percentage of income), deferrable under extreme economic hardship, and they don’t go away after bankruptcy.

This system would have the advantage of allowing patient-consumers to choose wisely with their own money, and not simply spend without discretion. This would likely need to be aided by mandating transparency in healthcare (Ala Herzlinger’s Healthcare SEC). Whatever a person spends on his health, he is responsible for. For a very sick poor person, they will pay a percentage of his income for the rest of his life, thereby sharing in the cost he is incurring on society.

This would solve the dual problems of medical expenses causing financial ruin and expenses rocketing to the stratosphere because we are not allowed to be consumers. It would cause problems in potential overspending for the very sick. It would also make insurance companies irrelevant, because the burden of risk is upon the government. In many cases, it would be an unequal burden on the rich; they would more often pay off their expensive loans while the poor would die with government medical debt (which would have to be forgiven).

Though I am always hesitant to give the government power, the exchange of a huge government program for a moderate one is palatable. The unequal burden on the rich already exists, and the cost savings by consumers driving the market (as in the RAND experiment) would more than make up for this inequity. Overall, the system would make a person’s health his own responsibility.

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